$300 Million War: Tech Wealth vs. CA Tax

More than $300 million has been donated to defeat a single state ballot measure, according to David McCuan, a political science professor at Sonoma State University. He identifies this as the most expensive fight for a state or local election in history. California voters will cast ballots on November 3 to decide whether to pass Proposition 40. The measure proposes a one-time 5 percent tax on the assets of residents who qualify as billionaires.

The opposition war chest is funded by major figures in the technology sector. Donors include Sergey Brin, co-founder of Google, and Tony Xu, the founder of DoorDash. Patrick Collison, co-founder of Stripe, and Chris Larsen, co-executive chairman of Ripple, have also contributed. Venture capitalists John Doerr, Michael Moritz, and Vinod Khosla are listed among the primary contributors. In contrast, supporters of the tax have raised only $32 million. This creates a spending ratio of nearly ten dollars for every dollar raised by the yes side.

Mark Zuckerberg, founder of Meta, has not donated personal funds to the opposition campaign. However, SEC filings reveal that he informed the company board of his intent to purchase a home outside of California to avoid the tax. The board, which includes Xu and Collison, responded by creating a new class of shares. This structure allows Zuckerberg to use the shares to pay the tax, potentially mitigating the impact on Meta's stock price.

The volume of advertising and mailed materials has generated confusion among the electorate. Brian Galle, an economics professor at the University of California at Berkeley who helped draft the proposal, received a flyer claiming the tax could apply to anyone, including those with retirement savings. Galle stated that these claims were not present in the original text of the measure. Ashley Craig, a volunteer for the pro-tax group Patriotic Millionaires, reports hearing similar concerns from voters about secret provisions. She notes that any changes to the tax would require a two-thirds majority in the state assembly.

Galle argues that the spending demonstrates the structural issue the tax aims to address. He states, "The irony is that Prop 40 is meant to make democracy more equal, but the billionaires are using their money to avoid that." He points to the Supreme Court's decision in Citizens United v FEC as the underlying legal framework. Francesco Trebbi, a professor at Berkeley's Haas School of Business, describes the contest as a dynamic between "Sergey Brin v millions of Californians," arguing that the disparity erodes public trust.

The campaign has exposed a division within the Democratic Party. The state party has officially endorsed the tax, but Craig says she has received limited ground support from party leaders. McCuan views the measure as a proxy test between progressive and moderate wings of the party. He suggests that a victory could encourage progressive candidates to propose similar ideas in the 2028 presidential election.

Governor Gavin Newsom, who is considering a 2028 presidential run, opposes the tax. He has called it "poorly written" and warned that it could harm the state if billionaires leave. Authors of the proposal estimate the collective wealth of California's billionaires at $2.3 trillion. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose the measure.

Opponents are also funding two other ballot measures. One would bar new state taxes on personal property or retroactive taxes. The other requires state auditors to review the financial impact of proposed tax measures before a vote. If either of these measures passes with more votes than the billionaire tax, it could nullify the tax even if voters approve Prop 40.

A recent poll by the Public Policy Institute of California found that voters narrowly support the tax. However, the same poll shows they also back the two measures designed to stop it. Mark Baldassare, the institute's statewide survey director, noted that only about one-third of citizen initiatives pass. He stated that this historical track record places the burden of persuasion on the yes side. He plans to conduct another poll as voters receive official state guides.

Suzane Jiminez, chief of staff at the SEIU health workers union which sponsored the measure, expressed confidence in the campaign. She reported that 3,000 volunteers have recently been knocking on doors and distributing flyers. Senator Bernie Sanders and Congressman Ro Khanna have held rallies across the state to support the effort. McCuan suggested that even a defeat could benefit the backers of the tax, as they could blame moderates and target big tech as a political issue.